can you pick individual stocks in an ira

Can You Pick Individual Stocks in an IRA?

can you pick individual stocks in an ira — short answer: yes. Most brokerage-held IRAs (Traditional and Roth) allow you to buy and hold individual publicly traded stocks. This article explains how that works, what types of IRAs affect your options, common custodian restrictions, tax and regulatory rules, and practical steps to trade or hold individual stocks in a retirement account.

In the first section you will get a concise answer to the question "can you pick individual stocks in an ira" and understand when you might choose a standard brokerage IRA versus a self-directed IRA or an IRA-owned LLC. Later sections cover trading constraints (margin, shorting, options), prohibited transactions, tax consequences, and recommended best practices for retirement-focused stock investing. If you want a custodial platform that supports a wide set of trading tools and custody, consider Bitget for spot trading and Bitget Wallet for secure custody and management of crypto-oriented retirement strategies.

As of 2026-01-21, according to the IRS Retirement Plans FAQs (Investments), IRAs remain a primary tax-advantaged vehicle for holding investments intended for retirement; check your custodian and the IRS for the latest guidance.

Overview of IRAs and Investment Flexibility

An Individual Retirement Account (IRA) is a tax-advantaged account designed to help individuals save for retirement. IRAs come in several common forms: Traditional, Roth, SEP, and SIMPLE. The core benefit is tax treatment: Traditional IRA contributions may be tax-deferred, while Roth IRA growth and qualified withdrawals are tax-free.

When people ask "can you pick individual stocks in an ira", they are usually asking whether they can buy individual publicly traded equity securities inside these tax-advantaged accounts. The straightforward answer is yes — most custodial brokerages allow you to hold U.S.-listed and many foreign-listed public stocks in IRAs. IRAs also commonly hold mutual funds, ETFs, bonds, and cash equivalents.

Beyond standard assets, some specialized custodians and self-directed IRA structures permit alternative investments such as real estate, private equity, or certain cryptocurrencies. Those options usually require additional paperwork, special custody arrangements, and stricter compliance with IRS rules.

As of 2026-01-21, Charles Schwab and major financial guides emphasize that IRA custodians set the exact menu of permitted investments and the allowed trading strategies. Always check your custodian’s disclosures before assuming any particular investment or tactic is allowed.

Types of IRAs and How They Affect Stock Investing

Custodial Brokerage IRAs (typical brokerage Roth/Traditional)

Most investors hold IRAs at retail brokerages. In these custodial brokerage IRAs you can generally:

• Buy and sell individual publicly traded stocks listed on major U.S. exchanges.
• Hold ETFs, mutual funds, bonds, and cash equivalents.
• Use the brokerage’s trading interface and tools to place market, limit, and other standard orders.

Custodial brokerages provide built-in custody, recordkeeping, tax reporting, and frequently mobile/desktop trading apps. They also impose permitted-strategy limits: margin, naked shorting, or high-risk options strategies are usually limited or disallowed in IRAs for regulatory and account-safeguarding reasons.

When asking "can you pick individual stocks in an ira", custodial brokerage IRAs provide the simplest and most common path for doing so.

Self-Directed IRAs (SDIRAs)

Self-directed IRAs expand the range of permitted investments beyond public stocks and bonds. With an SDIRA, a custodian that specializes in alternative assets allows account owners to acquire:

• Real estate (direct ownership, subject to special rules);
• Private equity or private company shares (subject to valuation and custody requirements);
• Certain cryptocurrencies via approved custodians or custodial partners;
• Promissory notes, tax liens, and other specialized assets.

SDIRAs provide broader choice but come with trade-offs: higher fees, additional documentation, valuation challenges, and stricter rules about prohibited transactions and disqualified persons (see below). If your goal is simply to buy publicly traded stocks, a standard custodial brokerage IRA is usually easier and less costly than an SDIRA.

IRA LLC / Checkbook Control

Some investors create an IRA-owned LLC (often called a "checkbook IRA") where the IRA owns a limited liability company, and the IRA custodian signs off on the custody. An IRA LLC can make execution easier for certain private or real asset investments because the LLC can hold assets and the manager (often the account owner) can direct transactions.

Important cautions for IRA LLCs:

• They are complex to set up and maintain.
• They carry a higher risk of running afoul of IRS prohibited transaction rules.
• They may trigger unrelated business taxable income (UBTI) or unrelated debt-financed income (UDFI) if the LLC uses debt or operates a business.

If you are considering a checkbook-control IRA LLC to expand investment choices, consult a qualified tax attorney and your custodian before proceeding.

Rules, Prohibitions, and Custodian Limitations

Knowing whether you can buy a stock in an IRA is only part of the picture. You also need to know what is prohibited or limited by the IRS and by your custodian.

Key IRS prohibitions and limitations:

• Certain assets cannot be held in IRAs, including life insurance contracts and most collectibles (art, antiques, certain coins), with some narrow exceptions.
• Investments that directly benefit the IRA owner or other disqualified persons are forbidden. Examples: buying property from yourself or selling property to your IRA.
• Borrowing against IRA assets or using IRA assets to personally secure loans is generally not allowed and can trigger prohibited transaction penalties.

Common custodian restrictions:

• Margin trading is typically not permitted in IRAs, because borrowing against securities violates the cash-only nature of many retirement accounts.
• Short selling is usually restricted or disallowed because it requires margin and carries settlement obligations.
• Some custodians restrict complex options strategies; where options are allowed, they are often limited to conservative, covered strategies.
• Certain foreign securities, penny stocks, or restricted offerings may not be available in standard IRAs.

Custodians vary. If you want to do advanced trading or hold niche assets, confirm permitted assets and trading permissions in writing before initiating trades.

How to Buy Individual Stocks in an IRA — Practical Steps

If your goal is to pick and hold individual stocks in an IRA, here is a practical step-by-step outline.

1. Choose the IRA type and custodian.

   • Decide between a Traditional or Roth IRA based on tax goals.
   • Select a brokerage custodian (or an SDIRA custodian for alternative assets). For crypto-capable custody and broader trading, consider Bitget and Bitget Wallet for custody of digital assets when relevant.

2. Open the account and complete account verification.

   • Provide identity documentation, beneficiary information, and sign the custodian’s IRA agreement.

3. Fund the IRA.

   • Make contributions (subject to annual IRS limits), or transfer/rollover funds from another retirement account using a trustee-to-trustee transfer when possible.
   • Avoid 60-day rollovers unless you understand the timing rules and limits.

4. Confirm permitted investments and trading permissions.

   • Read the custodian’s disclosures about permitted securities, margin, and options.
   • Request options approval levels in writing if you plan to write covered calls or use other option strategies.

5. Place orders using the trader interface.

   • Use market, limit, stop, or other order types provided by your custodian to buy eligible public stocks.
   • Monitor orders and keep records for performance and compliance.

6. Maintain records and annual reporting.

   • The custodian will typically provide Form 5498 (contributions) and Form 1099-R (distributions) where applicable.

Practical note: for many investors the whole process is simple and similar to opening a taxable brokerage account, except for the tax and distribution rules that govern IRAs.

Trading Activities Allowed and Common Restrictions

Day trading and active trading considerations

Many custodial IRAs allow frequent trading of stocks, but there are caveats:

• IRAs are generally cash accounts. You cannot use margin for buying power, which materially reduces the ability to use leverage for active day trading.
• Excessive trading may increase transaction costs and reduce long-term retirement returns.
• Some brokerages may apply pattern-day-trader rules to margin accounts; those rules do not apply to cash-only IRAs in the same way, but the lack of margin still limits day-trading setups.

Options, short sales, and margin

• Options: Many custodians permit conservative options strategies inside IRAs such as covered calls, protective puts, and cash-secured puts (subject to approval). Advanced or uncovered options strategies are usually disallowed.
• Short sales: Typically disallowed in IRAs because shorting requires margin and settlement obligations.
• Margin and leverage: Generally not allowed in IRAs; some custodians may offer limited margin-like features for option strategies but true margin borrowing is rare and restricted.

Frequency of trading and wash sale rules

• The wash sale rule prevents claiming a tax loss on a security if you buy a "substantially identical" security within 30 days before or after selling at a loss. The wash sale rule applies to taxable accounts.
• Losses inside an IRA generally do not generate a deductible loss on your tax return, and purchasing the same security in a taxable account while holding it in an IRA can create complex, unfavorable tax interactions. Be cautious — you cannot claim IRA losses on your personal return in most cases.

As a practical example: if you sell a stock at a loss in a taxable account and buy the same stock in your IRA within 30 days, the loss is still disallowed due to the wash sale rules as interpreted by the IRS in many contexts. For complex situations, consult a tax advisor.

Tax Implications and Limitations

Tax treatment of investments held inside an IRA differs from taxable accounts:

• Traditional IRA: Investment gains and dividends grow tax-deferred. Withdrawals are taxed as ordinary income when distributed, with early-withdrawal penalties potentially applying if you withdraw before age 59½.
• Roth IRA: Contributions are made with after-tax dollars. Qualified withdrawals (meeting age and holding-period requirements) are generally tax-free, including gains and dividends.

Important limitations:

• You cannot deduct losses realized inside an IRA on your personal tax return in the way you can with taxable accounts.
• You cannot perform tax-loss harvesting inside an IRA because losses do not provide tax-deductible benefits.
• Certain activities can generate unrelated business taxable income (UBTI) or unrelated debt-financed income (UDFI) for IRAs holding active businesses or using debt — this can lead to tax filings and tax liabilities within the IRA itself.

Always maintain clear records. The custodian usually reports distributions and contributions on IRS forms; you are responsible for understanding tax consequences when you take distributions or when UBTI/UDFI applies.

Prohibited Transactions and Disqualified Persons

To protect the tax-advantaged status of an IRA, the IRS forbids certain transactions and relationships.

Prohibited transactions include self-dealing or using IRA assets for personal benefit. Common prohibited examples:

• Selling property you personally own to your IRA.
• Using IRA assets as collateral for a personal loan.
• Allowing a disqualified person to personally benefit from IRA assets (for example, renting property owned by your IRA to yourself or a family member).

Who are disqualified persons?

• The IRA owner, their spouse, direct ancestors and descendants (parents, children, grandchildren), and certain entities controlled by the owner.

Consequences: if the IRS determines a prohibited transaction occurred, the IRA can be treated as distributed as of the date of the transaction, leading to immediate taxation and potential penalties. Because of the severity, avoid any transaction that could be interpreted as self-dealing.

If you are unsure whether an investment or structure crosses the prohibited-transaction threshold, consult a qualified ERISA/tax attorney before proceeding.

Pros and Cons of Holding Individual Stocks in an IRA

Pros

• Tax-advantaged growth: Gains and dividends compound without immediate taxation, which is powerful for long-term retirement investing.
• Simplicity for buy-and-hold: Holding high-conviction individual stocks in an IRA can be efficient for long-term investors who prefer select positions.
• Retirement protection: IRAs offer legal and tax frameworks designed to support retirement savings.

Cons

• No tax-loss harvesting benefit: Losses in IRAs generally cannot be used to offset taxable gains.
• Withdrawal restrictions and penalties: Early distributions may be taxed and penalized.
• Custodian restrictions: Certain trading tactics and securities may be disallowed.
• Concentration risk: Holding large positions in single stocks inside retirement accounts increases unsystematic risk and can jeopardize retirement goals.

When evaluating whether to hold individual stocks in an IRA, weigh tax advantages against the need for diversification, liquidity, and the custodian’s permitted strategies.

Best Practices and Practical Considerations

• Diversify: Avoid concentrating too much of your retirement portfolio in a single stock. Use position-sizing rules consistent with your time horizon and risk tolerance.
• Align with retirement goals: Use IRAs primarily for long-term savings rather than high-frequency speculative trading.
• Check custodian permissions: Before executing options, private placements, or alternative assets, confirm in writing that your custodian supports the trade.
• Document everything for SDIRAs: If using an SDIRA or an IRA LLC, keep thorough documentation of valuations, confirmations, and the chain of custody.
• Avoid prohibited transactions: Never use IRA assets to benefit yourself or a disqualified person directly.
• Monitor tax rules: Rules around UBTI, UDFI, and retirement-account taxation can change; stay informed and consult professionals when needed.

If you are building a retirement-focused stock strategy and also want integrated custody for digital assets, Bitget offers trading products and Bitget Wallet supports secure custody workflows you may evaluate as part of a diversified retirement plan.

Investing in Cryptocurrencies and Other Alternatives Within IRAs

Some custodians and SDIRA providers offer limited access to cryptocurrencies inside retirement accounts. Key points:

• Access is custodian-dependent: Not all IRA custodians permit crypto. Specialized custodians and some SDIRA providers support crypto custody.
• Custody and valuation are complex: Crypto assets require secure custody and consistent valuation practices for IRA recordkeeping.
• Regulatory and tax uncertainty: Rules and guidance for crypto inside retirement accounts are developing; treat crypto positions with careful compliance and risk management.

If you plan to hold crypto in an IRA, use custodians experienced in digital-asset custody. For integrated crypto trading and custody solutions, consider Bitget and Bitget Wallet, which specialize in managing crypto assets with custody and security features tailored for traders and long-term holders.

As of 2026-01-21, industry guides like NerdWallet and SmartAsset note increasing custodian support for certain crypto products but emphasize the need for specialist custody and advisor consultation.

Frequently Asked Questions

Q: Can I buy any publicly traded stock in my IRA? A: Usually yes. At most custodial brokerages you can buy publicly listed U.S. stocks and many foreign-listed stocks that the custodian supports. If you ask "can you pick individual stocks in an ira" the general answer is that brokerages permit publicly traded equities, but check custodian-specific availability.

Q: Can I short or use margin in an IRA? A: Generally no. Short selling and margin borrowing are typically restricted in IRAs because they require margin accounts and borrowing, which conflicts with many custodial policies.

Q: Can I trade options in an IRA? A: Some options strategies are permitted with custodian approval, usually conservative strategies like covered calls or protective puts. Naked option writing and advanced multi-leg uncovered strategies are commonly disallowed.

Q: Can I claim losses from IRA trades on my tax return? A: No. Losses inside IRAs are generally not tax-deductible on your personal return. You cannot tax-loss-harvest inside an IRA the same way you might in a taxable brokerage account.

Q: If I own a company, can my IRA buy shares of that company? A: Be careful. If you control the company, buying its shares in your IRA can trigger prohibited-transaction rules and self-dealing concerns. Consult a tax attorney before using IRA funds to purchase shares in a company you control.

Q: How often can I transfer or rollover IRA assets? A: Trustee-to-trustee transfers are unlimited. 60-day rollovers are limited (you generally can only roll over funds once per 12-month period if the funds pass through your hands). Use direct transfers to avoid rollover timing issues.

Regulatory and Contribution Considerations

• Contribution limits: Annual IRA contribution limits are set by the IRS and can change. Check current IRS guidance for the exact limit for the tax year in question.
• Required minimum distributions (RMDs): Traditional IRAs typically require RMDs starting at specified ages; Roth IRAs do not have RMDs for original owners in many cases.
• Rollovers and conversions: Converting Traditional IRA funds to a Roth IRA may trigger current taxation on pre-tax funds; direct trustee-to-trustee rollovers reduce rollover risk.

As of 2026-01-21, consult the IRS Retirement Plans FAQs and your custodian for the latest limits and RMD rules. Confirm all transfer and rollover steps with your custodian to avoid accidental taxable events.

Summary / Bottom Line

Most investors can hold individual publicly traded stocks inside IRAs at standard brokerages. If your question is "can you pick individual stocks in an ira", the practical answer is yes for custody-level brokerages, with expanded but more complex options available through self-directed IRAs or IRA-owned LLCs. Always confirm custodian permissions, avoid prohibited transactions, and align individual-stock holdings with long-term retirement goals.

If you want an integrated platform for trading and custody, evaluate Bitget and Bitget Wallet as part of your custody and trading plan. For complex structures or unusual investments (private placements, IRA-owned LLCs, or transactions with disqualified persons), seek professional legal and tax advice.

Further exploration and careful planning can help you use IRAs effectively to hold individual stocks while respecting tax rules and custodian policies.

References and Further Reading

• Roth IRA Investment Guide: What to Buy and What to Skip — Due
• How to Invest Your IRA — NerdWallet
• Considerations for Trading in a Retirement Account — Charles Schwab
• Buying Stocks in a Self-Directed IRA — IRA Financial
• Invest in individual stocks in Roth IRA? — Bogleheads forum
• IRA vs. Brokerage Account: What's the Difference? — MissionSquare
• Individual Stocks/Stock Options from ROTH IRA account — BenefitsLink forum
• How to Move Money From a Roth IRA into Stocks — SmartAsset
• Retirement plans FAQs regarding IRAs (Investments) — IRS

Notes: For account permissions, tax consequences, or complex structures, consult your IRA custodian and a qualified tax or ERISA attorney before acting.

As of 2026-01-21, the guidance cited above remains a current starting point for IRA investment questions; always verify custodian-specific policies and the latest IRS rules before executing transactions.